US
stocks managed to bank significant gains during the 2018 summer, although this
was considered to be a historically bad period for stocks. The S&P 500
managed to break above the January high and got past the 2,900 figure.
Tech
stocks and the Nasdaq Composite had been leading the market in terms of gains,
with the Nasdaq reaching the 8,000 milestone.
With
share trading so hot in the US these days, some analysts are beginning to ring
alarms, claiming that “dark clouds” can be seen on the horizon. With that being
the case, let’s see what will be the challenges for the US stock market in the
last quarter of 2018 and what needs to happen in order to see a continuation of
the impressive bull run.
US-China
relation in the first place
What
seemed to be just a tossing around is getting more and more serious. With a
deal already reached with Mexico, one already in negotiation with Canada, with
the EU expected to agree on a series of trade measures as well, it seems like
the purpose of this trade debacle had
China and its massive trade surplus with the US in the center stage.
This
isn’t just about trade at all, is about
who will be the next world’s dominating power. Share
trading could become more
volatile if the situation will escalate
further. The China 2025 program seems to be one of the greatest threats for the
US dominance, so President Donald Trump is determined to take whatever measures
will be required.
Source: pixabay.com
He
recently stated that another round of tariffs on $267 billion worth of Chinese imports are “ready to
go”. The next had triggered a short-term spike lower on stocks, showing that
investors are really anxious about this trade dispute.
Almost
two months ago, tariffs on $200 billion worth of Chinese imports were put under
supervision, with the implementation date being expected this month. Which
means those $267 represent other imports, bringing up the tariffs to almost all
imports from China.
The
US administration finds itself in a very delicate situation since the midterm elections are due to take place in
November. A bad management could lead to the Republicans losing some seats in
the Congress which will make it harder for
the US president to go on with his agenda. Despite impressive corporate
profits, politics and trade will again be on the center stage in the next few
months.
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